Hong Kong’s security watchdog wants to restrict ordinary investors to only a few whitelisted cryptocurrency tokens.
Hong Kong regulators will soon select which crypto currencies its people can invest in, as part of a slew of new digital asset laws coming this year.
The action is Hong Kong’s latest crypto regulatory step in a market with a long history of high digital asset trading volume.
According to Reuters, Hong Kong’s Securities and Futures Commission (SFC) is creating a list of crypto assets available to ordinary trading. According to Julia Leung Fung-yee, the SFC’s new CEO, these whitelisted crypto tokens will be extremely liquid and deemed safe enough for non-professional investors. Leung delivered these remarks on Jan. 11 during a panel discussion at the Asian Financial Forum in Hong Kong.
“Some virtual asset platforms have over 2,000 goods, but we do not want to allow retail investors to trade in all of them,” Leung explained, adding, “We will create the conditions that will allow retail investors to [only] trade in big virtual assets.”
Aside from the list of recognised tokens, Leung stated that the SFC will consult with the public on retail crypto trading laws. The authorised list is part of a larger crypto regulatory drive that will involve the publication of a consultation document by the end of the first quarter of 2023. This regulatory drive will also include new licencing standards for crypto exchanges and other providers of virtual asset services.
Leung’s purpose is to protect investors. The present bear winter has resulted in significant price declines, according to the regulatory chief. As of August 2022, investors in Hong Kong had lost $50 million to crypto frauds, according to CryptoPotato.
The proposed retail laws are the latest encouraging crypto development to emerge from Hong Kong. Stakeholders in the city-state have long declared their desire for it to become a crypto centre during the next bull run.
In October 2022, BitMEX Co-Founder Arthur Hayes predicted that the bull market would resume when China and Hong Kong “love crypto.” Hong Kong financial officials were attempting to recover the city’s earlier crypto-friendly position at the time.
A slew of crypto-related regulations imposed in Hong Kong over the last two years have dampened interest in the asset class. As a result, Thailand and Singapore have been home to various crypto initiatives, spearheading the charge for acceptance in Asia.